Holiday Lettings news - Flagging pound leads to sterling sales in Spain

Flagging pound leads to sterling sales in Spain

As the pound continues to flounder against the euro and the foreign property market starts to flag, Spanish vendors are considering new tactics to help boost sales. Overseas Property Professional (OPP) reports how Spanish estate agents are being advised to sell their property in sterling rather than the common European currency, in a bid to attract more British buyers.

The poor performance of the pound against the euro is proving a stumbling block for British investors wanting a piece of the Spanish lifestyle and means that their money is not going as far as they would like. Last week it was reported that the pound had fallen to its lowest level against the euro since it was introduced in 1995 and although it has since bounced back a little the pound is still not as strong as it was.

Peter Whitehead, sales executive at Hacienda del Alamo Golf Resort, explained that selling in sterling rather than euros was definitely worth looking into: "It is something we are looking at. However, most of the purchasers in this country have a euro mortgage so it becomes less of a problem. For those that don’t, or need a quick sale and a UK buyer is ready, then it is something to examine. It is another selling tool and would definitely be a good sales vehicle."

The widespread nature of the euro means that this is not just an isssue that British buyers will encounter in Spain , but all across the euro-zone. Nevertheless, Spanish vendors are particularly worried as they have noticed a decline in activity from the British, who play a vital role in foreign property investment in the country.

The novel way of selling has already been put into practice in the Spanish market of Menorca. According to Colin Guanaria, of Menorcan property agency Bonnin Sanso, the last five sales in the last fortnight were agreed in pounds sterling. Guanaria added that it was an ideal solution for many as "a lot of British buyers are unsure of the exchange rate at the moment or would just prefer to deal in pounds."

To put it all into context, a year ago £1 would have bought roughly €1,50 but today it is worth only €1,25. In concrete terms, a property valued at €200,000 in Spain will currently set British investors back £160,000 compared to roughly £133,600 the same time last year. The option of selling in alternative currencies has long been open to Spanish vendors, but until now many were unaware of it.

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